Lawrence: Welcome to the Federal Workforce Roundup 8-14 June 2025, your
essential weekly briefing on the policies and proposals shaping your career,
your benefits, and your retirement.
Whether youâre a current federal employee navigating changes in the civil service,
or a retiree keeping a close watch on your hard-earned pension and healthcare, this
is your source for the latest news from Capitol Hill and the executive branch.
Each week, we cut through the noise to bring you the critical updates on budget
negotiations, pay raises, workforce policies, and the legislative battles that
directly impact the federal community.
Let's get you up to speed on what happened this week.
Issues That Affect Current and Retired Federal Workers
Budget Reconciliation and Retirement Benefits: A major budget package,
the One Big, Beautiful Bill Act (H.R.
1), is advancing through Congress with provisions targeting
federal employee benefits
. The House narrowly passed H.R.
1 on MayÂ 22, and Senate committees unveiled their draft on JuneÂ 12
. Notably, proposals that would directly cut already-earned retirement benefits
have been softened in the latest version.
For example, the Houseâs initial plans to shift pension calculations
from a âhigh-3â to âhigh-5â salary average and to raise all current
employeesâ pension contributions to 4.4%
were removed before final House passage
. Likewise, the Senate draft dropped the Houseâs provision to eliminate the FERS
annuity supplement (a Social Security bridge for those retiring before 62)
. Federal retiree advocates welcomed this retreat â as NARFEâs John Hatton
noted, lawmakers should not âcut back on vested benefits that are
based on earnings from previous workâ
. However, other long-term changes remain on the table.
Both House and Senate versions would require newly hired federal
employees to pay significantly more toward their pensions if they want
to retain civil service protections.
Under the Senate plan, new hires must contribute 9.4%
of pay to FERS, or a steep 14.4%
if they opt to keep their TitleÂ 5 job protections
. This two-tier choice â essentially âpay extra for your rights or become
at-willâ â has alarmed observers who say it could undermine the entire retirement
systemâs viability for the next generation
. NARFE warns that forcing exorbitant contributions could make the
benefit ânot even a bang for your buck,â discouraging younger
employees from staying in the system
. Health and Legal Protections: Other provisions in the reconciliation package
affect both current workers and retirees.
One item would impose a $350 fee for appeals to the Merit Systems Protection
Board (MSPB), payable by employees, former employees, or applicants
who challenge personnel actions
. (The fee would be refunded if the appellant wins.)
This aims to deter frivolous cases but has drawn fire from employee
groups as a barrier to due process.
Another section requires agencies to audit Federal Employees Health
Benefits (FEHB) enrollments to remove ineligible family members
. Unlike the benefit cuts, this FEHB audit idea has seen little
opposition â with GAO estimating nearly $1Â billion per year is spent on
ineligible dependentsâ health coverage
. Audits would apply to all enrolleesâ family plans, meaning current
workers and retirees could be asked to verify dependentsâ eligibility.
No immediate changes to core FEHB benefits or premiums are proposed,
but tighter enforcement could affect those covering spouses or children
who donât meet eligibility rules.
Legislative Status: As of June 14, the Senate Homeland Security
and Governmental Affairs Committee was marking up its portion of the
bill, eyeing a JulyÂ 4 deadline to finalize the reconciliation package
. If the Senate passes a version, negotiations with the House will follow.
Federal unions and retiree groups are lobbying intensely during this window.
They achieved some success in getting certain benefit cuts removed â for
instance, the âhigh-5â pension formula change was struck from the
House bill after bipartisan pushback
. But they remain vehemently opposed to what remains.
âThis so-called reconciliation bill is in fact a big retaliation bill,â said
AFGE President Everett Kelley, âa direct assault on federal employees and their
labor unionsâ that would slash take-home pay and obliterate workplace rights
. NARFE President William Shackelford vowed âto keep fighting until all of this billâs
onerous provisions directed at federal employees and retirees are removedâ
. In sum, both current employees and retirees have a stake in this
fast-moving budget legislation â it carries long-term implications for
pension formulas, early retirement supplements, and the merit system itself.
Issues That Affect Current Federal Workers
Civil Service Protections and Workforce Rights: The ongoing budget
reconciliation fight has particularly high stakes for current federal
employeesâ working conditions.
Provisions in H.R.
1 would fundamentally alter the civil service framework for new
hires â effectively introducing an at-will employment system.
Under the Senateâs draft, all new federal hires would be hired as
at-will unless they pay an extra 5% of salary into FERS (on top of an
already higher base contribution)
. Choosing not to pay means surrendering civil service due process rights and
being terminable âfor good cause, bad cause, or no cause at all.â
Employee groups argue this is a backdoor way to revive âSchedule
Fâ-style political purges.
Rep.
Stephen Lynch (D-MA) called the plan a âbackdoorâ for ScheduleÂ F
that would enable partisan mass firings of nonpartisan staff
. NARFE likewise warned it sets a dangerous precedent by taxing those who retain merit
protections â essentially a 5% pay penalty â and could discourage agency talent
. Unions are uniformly opposed.
AFGEâs Kelley said the plan would âmake it that much harder for agencies
to recruit and retain qualified employeesâ by stripping workplace rights
. The American Federation of Government Employees (AFGE), National Treasury
Employees Union (NTEU), and others also blasted a suite of anti-union
measures folded into the Senate bill.
These include a 10% surcharge on union dues paid via payroll deduction and a
mandate that unions reimburse agencies for official time (hours spent on
representational duties) or face debarment
. NTEU President Doreen Greenwald described such proposals as âpunitiveâ¦union-bustingâ
â noting they would âslash the take-home pay for newly hired civil servantsâ without
improving benefits, while hampering unionsâ ability to represent workers
. In sum, current federal employees face a potential future where new
colleagues have fewer rights and unions are financially squeezed.
Executive Actions on Firing and Reorganization: Outside of
Congress, the executive branch is pursuing its own workforce reforms.
The Office of Personnel Management (OPM) issued a proposed rule on June
2 to expedite removals of federal employees for âsuitabilityâ issues (e.g.
misconduct or failing to meet background standards).
The rule â titled âImproving Performance, Accountability and Responsiveness in the
Civil Serviceâ â would allow agencies to fire employees who no longer meet
requirements in as little as 5 working days, with greatly limited appeal rights
. OPM plans to apply to current employees the same rigorous
suitability adjudications that previously applied only to new hires
. This means a worker deemed âunsuitableâ could be terminated almost immediately,
with MSPB jurisdiction curtailed.
The Trump administration argues this will rid agencies of problem employees faster.
However, federal employee advocates strongly object.
NARFE submitted formal comments on JuneÂ 6 opposing the rule, arguing
it would âpave the way for this and future administrations to remove
competent, nonpartisan civil servants and replace them with political croniesâ
. In other words, critics see it as an attempt to erode 140Â years of
merit-based civil service protections by making career staff easier to
dismiss for subjective reasons.
This controversy echoes the broader theme of the budget billâs at-will
employment provisions â together signaling a significant shift in how
secure a federal career might be.
Meanwhile, Congress is weighing a dramatic expansion of executive
authority to reshape agencies.
The Senate HSGACâs draft would give the President broad, fast-track powers to
reorganize and downsize federal agencies.
It earmarks $100Â million for the Office of Management and Budget (OMB)
to implement agency restructuring plans over the next decade
. Critically, the bill would exempt the President from many current laws
that require congressional approval for reorgs, allowing sweeping
changes âwithout obstructionâ from Congress or even the courts
. This comes as the administration has faced legal injunctions blocking its
agency reductions-in-force (RIFs).
(Federal courts recently enjoined agencies from carrying out RIFs and reorgs that
lacked explicit congressional sign-off
. Lawmakers are effectively debating whether to override those court orders by statute.
A federal judge warned on JuneÂ 9 that her injunction against unilateral
agency cuts will stand, but âwhatever Congress says can happen going forward,
can happenâ â âall bets are offâ if lawmakers authorize the reductions
. If enacted, this would mark the return of authority not seen since
the 1980s, when presidents last had carte blanche reorganization power
. For current feds, it could translate to accelerated agency consolidations or
closures and the elimination of positions with minimal congressional oversight.
The bill even encourages workforce slimming by establishing a âbonuses for
cost-cuttersâ program â offering cash awards up to $10,000 to employees who
identify wasteful spending that gets cut
. While incentivizing thrift, the overarching aim is clearly
a leaner federal workforce.
Mass Layoffs and Agency Funding Battles: Federal employees are also confronting
the reality of agency-level job cuts.
This week saw moves in the House Appropriations Committee to green-light
deep workforce reductions at two of the governmentâs largest departments.
On JuneÂ 12, a House panel approved the FY2026 Defense spending bill with
funding trims corresponding to the Pentagonâs plan to eliminate ~45,000
civilian jobs (about a 5â8% cut)
. The same day, in drafting the VAâs budget, House Republicans rejected an amendment to
halt the Department of Veterans Affairsâ plan to fire around 80,000 employees
. That VA downsizing â aimed at returning to 2019 staffing levels â is part
of an aggressive reorg that the VA, with help from the Department
of Government Efficiency, intends to carry out by the end of summer.
Veteransâ groups and unions have decried the cuts as harmful to veteran
services, and Democrats call it a betrayal of promises to veterans
. Nonetheless, the Houseâs draft VA appropriations bill did not
intervene to stop the layoffs.
In effect, lawmakers signaled support for the administrationâs workforce
reduction agenda at VA and DoD.
The message to current federal workers is sobering: thousands
of positions are on the chopping block as agencies âstreamline.â
AFGE, which represents 311,000 VA employees, warns that veterans
and the public will âsuffer unnecessarilyâ from these cuts
. But VA leadership, backed by the White House, asserts that the
governmentâs purpose is to serve citizens, not to employ people â even
if that means painful decisions
. Expect continued debate as these spending bills advance, but for now,
Congress is largely aligning with the push to shrink the federal workforce.
Pay and Benefits Updates: Amid these challenges, there was
at least some focus on pay.
The White Houseâs budget outline for FY2026 proposed no general pay
increase for civilian federal employees , effectively a pay freeze next year.
This is part of $163Â billion in proposed spending cuts that unions
say will âdestroy governmentâ services
. In response, lawmakers have introduced the Federal Adjustment of Income Rates
(FAIR) Act, which NTEU and other unions endorse, calling for an average 4.3%
pay raise in 2026 for federal workers
. The FAIR Act represents the workforceâs hope to keep salaries competitive as
inflation and private-sector wages rise.
Itâs still early in the budget process, and ultimately Congress will set the
pay raise (if any) later this year.
On a positive note for employees, military service members are slated for a 3.8%
raise in 2026, and House appropriators indicated civilian pay might be
revisited once full budget details arrive
. Additionally, some unions are securing wins through bargaining.
This week, one of the Postal unions â the National Rural Letter Carriersâ
Association (NRLCA) â ratified a new collective bargaining agreement through
MayÂ 2027, with annual wage increases and semiannual COLAs for rural carriers
. The American Postal Workers Union (APWU) also mailed out ballots
for its tentative 3-year contract, touting no-layoff protections and
multiple pay improvements achieved even in todayâs challenging climate
. These developments donât apply to most federal employees directly
(since USPS has separate labor agreements), but they show unions
still negotiating hard-fought gains.
In summary, current federal workers face a wave of changes â from legislation that
could alter their rights and retirement prospects, to executive efforts to
speed up firings, to budget-driven job cuts â all while fighting for
fair pay and maintaining the ability to serve the public effectively.
Issues That Affect Retired Federal Workers
Social Security Windfall Elimination Provision (WEP) and GPO Repeal:
Retired federal employees received momentous news earlier this year,
and updates continued this week.
In January, President Biden signed the Social Security Fairness Act into law,
which repealed the Windfall Elimination Provision (WEP) and Government Pension
Offset (GPO) effective JanuaryÂ 2025
. WEP and GPO had long reduced Social Security benefits for many
federal retirees â particularly CSRS pensioners with some Social
Security credits, and those receiving spousal Social Security benefits.
The repeal means retirees affected by those provisions are now entitled
to full benefits going forward.
By late February and March, the Social Security Administration (SSA) had adjusted
most beneficiariesâ accounts, issuing retroactive payments to compensate
for Januaryâs higher benefit amounts
. During the week of JuneÂ 8â14, SSA provided a fresh update
on the WEP/GPO implementation.
In a communication on JuneÂ 9, SSA outlined what retirees should expect:
when increased payments will arrive, how Medicare PartÂ B premiums deducted
from Social Security will be handled, tips to avoid scams, and information
on any back payments still due
. This update is important for federal annuitants (and their survivors)
to understand the practicalities of their new Social Security benefits.
Not everyone has found the process seamless â NARFE has
pressed SSA to extend retroactive payouts to all who are entitled.
The agency currently uses a six-month âlookbackâ for GPO applicants,
which NARFE argues is insufficient.
Many widows/widowers never applied for Social Security due to GPO reducing it to
zero dollars, and NARFEâs JuneÂ 6 letter urges that they should receive full back
benefits regardless of when they now apply
. This advocacy is ongoing, but the bottom line is that federal retirees
are finally seeing relief from WEP and GPO, correcting what NARFE and
bipartisan supporters long saw as unfair penalties on earned benefits.
Federal Pension and COLA Protections: Apart from Social Security, retired
feds have kept a close eye on the budget proposals because some
provisions could indirectly affect them.
The Houseâs reconciliation bill initially threatened to change how federal
pensions are calculated (the high-5 vs high-3 issue) and to eliminate the FERS
annuity supplement for future retirees
. As noted, those specific cuts are not in the current Senate draft , thanks
in part to vigorous opposition.
Had they advanced, they would have reduced the annuities of
future retirees (and possibly even some recently retired folks).
For example, moving to a high-5 average salary would generally lower oneâs
computed pension â potentially costing thousands over a retirement for those
who peaked in their final three years
. Eliminating the FERS supplement starting in 2028 would have hit any FERS employees
who retire before ageÂ 62, shrinking their income until Social Security kicks in
. "This bill would claw back part of the value of vested retirement
benefits via elimination of the FERS supplement,â warned NARFE President
Shackelford, who also noted it could even retroactively hurt those
taking early-outs in ongoing RIFs
. Fortunately for current retirees, those changes appear stalled for now â and
anyone already retired or eligible for the supplement before 2028 would be
grandfathered under the Houseâs plan
. Nonetheless, NARFE and other retiree advocates remain on high alert.
They have been rallying retirees to contact Senators and express strong
opposition to any benefit cuts.
With the slim margins in Congress, even a few lawmakers changing stance
could protect retireesâ pensions.
The message from advocacy groups is that retired federal workers earned
their benefits over decades of service, and balancing budgets should
not come at the expense of those earned pensions and health benefits.
Healthcare and Other Benefits: Retired Feds share the FEHB health insurance
program with current employees, so the aforementioned FEHB dependent audit
initiative will include annuitants.
While removing ineligible individuals (like ex-spouses who should have been
taken off a family plan) is aimed at cost savings , annuitants should be
prepared to verify the status of covered family members during periodic audits.
On the bright side, there were no proposals to increase FEHB
premiums for retirees or to limit plan choices this week.
Likewise, the budget proposals do not target cost-of-living adjustments (COLAs)
for federal pensions â a relief, given that inflation has been a concern.
In fact, retirees under CSRS and FERS received substantial
COLAs in January 2025 (8.7%
for CSRS, 7.7%
for FERS), and mid-year data suggest another significant COLA could be
on the horizon for 2026 if inflation persists (though final numbers
wonât be known until the fall).
Notably, those COLAs were granted in full despite the administrationâs cost-cutting
environment â a sign that retiree COLAs remain politically sensitive to alter.
One small COLA-related update: individuals on the Federal Employees
Compensation Act (FECA) rolls (injured employees) got a 2.8%
COLA in April 2025 , which is separate from the pension COLA but of interest
to some disabled federal retirees.
OPM Retirement Services Modernization: A quieter but impactful development for
future retirees is OPMâs push to modernize the retirement application process.
OPM announced it is transitioning to fully digital retirement processing,
moving away from the old paper-based system that often caused delays
. As of JuneÂ 2, 2025, federal agencies must submit new retirement applications and
documentation electronically to OPMâs new online system, with paper submissions
no longer accepted after JulyÂ 15, 2025
. OPMâs goal is to streamline and speed up pension adjudication â currently a
notoriously lengthy process averaging 3â5 months or more for new retirees.
The agency acknowledged that antiquated, fragmented systems have led to errors and
backlogs, and stated that the new digital system will âfully addressâ these problems
. NARFE, which has long advocated for such modernization, welcomed this move.
If the online retirement application (ORA) works as intended, it should
reduce the waiting time for retirees to receive their full annuity payments
. However, OPM will need to prove it can implement the technology effectively.
Retirees and near-retirees should ensure their agencies are prepared to use the
new system and that their records are accurate in the electronic pipeline.
The coming months will reveal whether this innovation lives up to its promise of a
smoother retirement claims experience.
Retiree Advocacy and Outlook: Retired federal employees, through
organizations like NARFE, remain deeply engaged in all these issues.
They recognize that todayâs policy changes â whether itâs the budget cuts to
agencies, civil service rules, or benefits tweaks â can affect the stability of their
retirement and the services they rely on.
The good news is that retiree advocacy has shown results: the full repeal
of WEP/GPO after decades of effort is a prime example of a victory
. Additionally, the removal of the high-5 pension formula proposal and preservation
of COLAs demonstrate that retiree voices are being heard in the process
. Going forward, retirees will watch the final stages of the
budget reconciliation like hawks.
Any conference compromise will need to be scrutinized for impact on FEHB,
pensions, and other earned benefits.
NARFE has encouraged its members (many of whom are retirees) to continue contacting
legislators while the Senate deliberates
. In the words of NARFEâs advocacy team, âNOW is the time to act.â
Retirees are also allied with active employees in this fight â after
all, protecting the civil service and its benefits today ensures the
value of federal retirement tomorrow.
As this weekâs news shows, whether itâs securing a long-sought Social Security
fix or heading off a cut to pensions, staying informed and engaged is paying
off for the federal retiree community.
And thatâs a wrap on this weekâs Federal Workforce Roundup.
The landscape for federal employees and retirees is constantly shifting,
with major decisions being made about everything from pay and job security
to retirement benefits and the very structure of the civil service.
Staying informed is your best tool.
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Thanks for tuning in.
Weâll be back next week to track the latest developments
and what they mean for you.
Until then, stay engaged and be well.